Governing Decentralized Production: Institutions, Public Policy, and the Prospects for Inter-firm Collaboration in US Manufacturing

Abstract

Much of the literature on the changing face of US manufacturing acknowledges that successful governance of decentralized production is vital to its future but questions whether in practice firms will engage in the collaborative relationships envisaged by optimistic theorists of a "new production paradigm". Our interview-based field research on large and small metalworking firms in the US upper Midwest shows that although large manufacturers are actively seeking to improve collaboration by sharing strategic information and engaging in joint design, pervasive organizational dysfunctions create systemic barriers to the fuller development of cooperative relations with suppliers. But these barriers do not appear insurmountable. The example of a Wisconsin policy experiment is used to demonstrate the viability of institutional solutions that can help resolve inter- and intra-organizational blockages, while encouraging manufacturing firms to follow through on the collaborative strategies they officially espouse.